Anthem is taking its blocked $54 billion acquisition of Cigna to the U.S. Supreme Court, asking the highest court to review the rejection by a federal appeals court.
According to a press release from Anthem, it feels the 2-1 decision offers an opening to save the deal. In his dissenting opinion, Judge Brett Kavanaugh said he agreed with Anthem’s argument that the merger would produce efficiencies benefiting “employer-customers who obtain insurance services from Anthem and Cigna.”
He didn’t say these efficiencies were enough to resolve all antitrust issues, and stated he would’ve sent the case back to the U.S. District Court to weigh in on potential anti-competitive effects in the insurer’s dealings with providers.
“Citing the circuit split over the consideration of efficiencies in merger analysis, Anthem urges that 1960s-era merger precedents relied upon by the courts below must be updated to reflect the modern understanding of economics and consumer benefit,” Anthem said in a statement.
The Anthem-Cigna deal was blocked in February. Cigna responded by suing Anthem for $15 billion in damages, including the $1.85 billion breakup fee. Anthem has continued pursuing the acquisition, losing its appeal on April 28 in a decision applauded by several major medical associations.
“If the deal moved forward, insurers would have less of an incentive to work with hospitals on innovative arrangements to improve care throughout the delivery system for patients,” said American Hospital Association President and CEO Rick Pollack. “In addition, Anthem’s use of market power against providers would have put access to and the quality of health care at risk.”
The request for a review, called a writ of certiorari, is typically answered by the Supreme Court within six weeks.
As is always the case with the Supreme Court, the odds are against the justices even taking up Anthem’s request. The court typically takes up only 80 of the more than 7,000 cases its requested to hear every year.
Analyst Michael Newshel of Evercore ISI doesn’t expect the high court to overturn the previous ruling. In his prediction to StreetInsider, he said the merger will likely break, and to expect “continued litigation or settlement over the breakup fee."